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Equity Market

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  • 1. Equity

2. Equity market is another name for astock 3. The term equity also refers to the valueof someones ownership of abusiness, property, or a shareholderspartial ownership in a 4. An equity is a stock or stock share notbearing fixed 5. In other words an equitys value risesand falls with that of a company and itsshares. It does not pay guaranteedinterest as with a 6. Use of the term equity market remindsus that a stock market investment isowning shares of a companys 7. An equity market is a public marketwhere stocks are listed, bought, 8. An equity market, or stock market, hasmembers who do the buying and 9. Everyone else pays a commission for thisservice in order to buy stock or 10. Now, in the computer age, exchangessuch as the NASDAQ are virtual and allactivity is in a computer 11. This contrasts with the traditionaloutcry system of the New York StockExchange (NYSE) where orders flowthrough a real person, a floor 12. Equity markets allow companies to raisemoney without 13. Rather than incurring debt the companysells ownership shares, giving awayfuture profits and giving a vote in theaffairs of the company for each 14. Although a public stock company maynot incur debt by issuing stock, it alwaysruns the risk of a 15. An outside party can purchase asufficient number of stock shares tocontrol the companys board ofdirectors, name its own managementand take over the 16. Besides allowing a company to raisemoney, equity exchanges offer veryliquid 17. Stocks are almost always easier to buyand sell and a clear market value thanreal estate, for 18. There are equity exchanges throughoutthe 19. The New York Stock Exchange andNASDAQ are the two large 20. Canada has the Toronto Stock Exchange.European exchanges include the LondonStock Exchange, the Paris Bourse, andthe Deutsche 21. Asia has the Hong Kong StockExchange, the Tokyo Stock Exchange, theBombay Stock Exchange, and theShanghai Stock 22. In Latin America there are theBM&FBovespa in Sao Paolo, Brazil andBMV, the Bolsa Mexicana de 23. In the United States market indexes suchas the S&P 500 help traders andinvestors follow the market 24. A problem with dealing in many equitymarkets outside of the United States isthe lack of 25. The United States Securities andExchange Commission (SEC) overseesAmerican stock markets, helping 26. insure that illegal insider trading, forexample, does not enrich some at theexpense of 27. Although the SEC does not do a perfectjob it provides an oversight that is sadlymissing in many markets outside of theUnited 28. Even basic stock information may belacking on some foreign 29. Unless the investor has excellent insideinformation in some foreignexchanges, the best stock marketinvesting strategy may well be to tradeand invest at 30. Trading in the equity market requireslearning the basics of stock 31. As stock prices move up and downtraders and investors buy stock and sellstock in search of a 32. A day trader will buy and sell within aday, typically holding no stock 33. Long term investing engages intechniques like value stock investing inorder to capture a stock at a low priceand allow it to appreciate in value overmany

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